The Ministry of Corporate Affairs (MCA) has issued an advisory urging Limited Liability Partnerships (LLPs) to strictly adhere to digital compliance norms when processing partner resignations, to enhance legal transparency and avoid future disputes. The advisory, released in June 2025, emphasizes that any resignation of a designated or ordinary partner must be digitally recorded and filed through Form 4 on the MCA V3 portal within 30 days of the effective resignation date. This step ensures that the public record accurately reflects the LLP’s active structure and avoids unintended liability for former partners.

According to the MCA, both the resigning partner and the continuing LLP must digitally sign and validate the Form 4 submission, along with supporting documents like the resignation letter, consent from remaining partners, and an updated LLP agreement, if applicable. The ministry has warned that failure to update this information promptly can result in regulatory penalties, and in some cases, the resigning partner may still be held liable for actions of the LLP taken after their intended exit. This digital record serves as conclusive proof of the change in partnership for legal and tax purposes.

To support this initiative, the MCA portal now includes auto-alerts, partner status dashboards, and integrated tracking systems that notify LLPs of pending resignation filings or incomplete transitions. Legal professionals advise LLPs to maintain internal records of all partner changes and to regularly verify their master data on the MCA portal to ensure accuracy. This advisory is part of a broader push to foster accountability, improve governance, and reduce conflicts arising from undocumented or improperly executed partner exits.